The Marketing Economy: Why advertising still matters in a social media, word-of-mouth world

Disclosure: I am Vice President, Influencer Marketing at BlogHer. Advertising and social media marketing programs are a significant source of revenue for my company and for the bloggers in our advertising network.

Anyone who knows me, even a little, knows how passionate I am about word-of-mouth marketing and the amazing potential of the voice of the customer (blogger or simply happy camper) to move the needle for brands. It’s part of my professional DNA, and was even before the advent of social media. Back then we called them testimonials and put them in case studies and adverts, but the principle was the same. People like to hear from real people.

My passion for tapping into real voices, real stories is one of the reasons I joined BlogHer nearly three years ago. As part of this team, I am able to help connect brands and bloggers in mutually beneficial ways more than I ever could as a solo independent consultant.

No one is more passionate than I am about the real stories about life and about brands revealed by social content every day.

But I still believe in advertising. Just as passionately.

Saying that the digital banner is “dead” or no longer relevant in today’s marketplace is premature. The banner is only dead if we let it be so, and if we do, shame on “us.” The marketing economy needs advertising just as much as it needs public relations and word-of-mouth marketing and sponsored content and direct response and every other element of the marketing mix. For a number of reasons.

First, consumers need and want to hear directly from companies about their products. Advertising is the most efficient way to reach a lot of people at a relatively low cost; the company can deliver a consistent controlled message to exactly the audience it wants to reach. Keep in mind — it is not that consumers don’t like ads; it’s that we don’t like BAD ads.

It’s incumbent upon the industry to develop creative, compelling digital ads that help brands move the needle. Should ads use more social content? Sometimes, and the IAB has addressed this with new units like the Portait (one of the Rising Stars). But abandoning the digital banner in favor of “native advertising” (whatever that is, and more on that in a moment) is a fatal error that will destroy the balance of the marketing economy. We need both.

Here’s the thing. Whatever you call it — “native advertising” or sponsored content (my preference) — it relies on the existence of publishing vehicles, whether mainstream media sites like Mashable and Forbes, or independent publishers like the bloggers in the BlogHer Publishing Network. And without advertising revenue, these publishers will be in a world of hurt. Why? Sponsored content revenue is active revenue; the publisher has to create this content, and that costs. Time at best, and in the case of larger publishers, money too. Advertising revenue is passive, and scales easily.

Bottom line, without advertising revenue, the blogs we depend on for word-of-mouth marketing might not exist. It’s no different than the long ago print days, when I managed marketing for tech firms; our policy was that if we believed a publication was appropriate for our press releases, we would at least consider it for our advertising dollars. Sometimes we just couldn’t afford the rates but we understood that the publications we relied on, relied upon advertising to pay their bills.

It is no different for bloggers.

Before I move on to my final point about why advertising matters in the social marketing economy, I want to address the term “native advertising.” I wholeheartedly agree with Lori Luechtefeld, the author of recent iMedia Connection article, Why “native advertising” must die. She points out that we already have terms for the acceptable activities usually bundled under the term native advertising — to whit, sponsored content and advertorial –so why do we need a new term? The third concept, the misdirection, or deliberate masking of the advertising nature of the content, is a betrayal of consumer trust. She writes:

“But that third manifestation of native advertising? The Misdirection? If marketers and publishers have coined the phrase “native advertising” with the hope of legitimizing practices like that, then we’re all in deep shit. That’s a battle that reputable publications have been fighting since the dawn of journalism, and for good reason. If you blur the line — especially intentionally — between editorial and advertising, you will lose reader trust. And then you’ll lose readers. And then it’s pretty much over.”

Not to mention, this sort of misdirection would be a flagrant violation of the FTC Guidelines for Endorsements and Testimonials.

Finally, in the social marketing economy, we need to stop worrying about whether content is paid owned or earned. What matters is whether it is shareable. Likewise, we need to get rid of “viral” as the Holy Grail of social marketing. In the real world, viruses are BAD, and by and large, when it comes to corporate content, bad news spreads far faster than the good. What we need to focus on is creating compelling content that speaks to our consumers, not at them. That they will want to share. That’s what creates the “network effect” we are looking for when we say we want our content to go viral.

What we really want is for our customers to share our story with their friends, whether they first saw it in an ad, or on our website or Facebook page, or in sponsored content on a blog or the social graph.

Or all three.

Because isn’t that what REALLY moves the needle, when our customers are engaging with us across multiple platforms, in multiple ways. It’s not about a single click-through. It’s the cumulative effect of all the ways the consumer can engage with us in the balanced marketing economy.

Ads are part of that, and we need their storytelling just as much as we need blogs and editorial, Facebook and Twitter, Pinterest and Instagram, and whatever comes next.